One of the bigger news items in the last month has been the International Energy Agency forecast that the United States will pass Saudi Arabia as the world's biggest oil producer by the end of this decade and achieve near energy independence by the 2030s. I know that many have challenged this pronouncement, and even the Agency that made this statement pointed to certain assumptions behind its analysis, but it still a trend worth noting. Of course, the key game-changer is the process known as ‘fracking,’ forcing open rocks by injecting fluid into cracks.
Needless to say, the United States appears to be committed to a future where fossil fuels underlie its energy policy. Interestingly, the US vision stands in stark contrast to the United Kingdom. Here in the UK, the government intends to remake the country’s electricity market and inject some £110 billion into new energy infrastructure, particularly low carbon.
Energy rates here in the UK are about four times what many Americans pay. The public may believe that it is all because of the private utility companies' greed that operates in the deregulated power generation and distribution sector. Still, my experience from having recently worked with one of the bigger players is that much of the cost structure is driven by a dizzying mix of taxes and onerous government regulation designed to shift the country towards a lower carbon future.
I feel very mixed emotions because even though I care about the environment, the higher rates to consumers could be avoided. After all, the UK's geology is such that ‘fracking’ is a commercial possibility here. But as Peter Voser, the CEO of Shell, warned two weeks ago, Europe is in danger of being left behind as both the United States and China leap ahead in the production of unconventional gas and oil. USA Tax Singapore
Returning to Trinidad, if I am to understand what I am hearing, it seems as if the island will soon need to decide whether they will follow the US and embrace the new technologies that make unconventional gas and oil possible – or follow the European model and shy away from them. Some believe that the government's real reason for being so gung-ho with the controversial highway in the south-west is oil. Specifically, the highway would be the first step in opening up the region to extracting oil trapped in tar sand deposits.
An online article entitled “Tar Sands in T&T – A look at the world's dirtiest oil, from Canada to Trinidad and Tobago” explains that the area of interest for tar sands development begins approximately a kilometer south-east of the Pitch Lake, near Vessigny. It says that associated industrial sites would extend north of the eastern stretches of Point Fortin. Apparently, synthesizing bitumen on a large scale requires vast energy inputs, and in the case, this would be supplied by natural gas. The author speculates that the new gas-fired power plant near La Brea could power tar sands extraction, and the fact that it was built on the site of the defeated smelter is quite suspicious.
According to this article, the “industrial equipment from giant trucks to conveyors, slurries, and upgraders all require large roadways. The highway expansion project in southwest Trinidad from Point Fortin to two points outside San Fernando would greatly assist in moving tar sands-related heavy industrial equipment. Furthermore, the south-eastern point of the proposed tar sands area of interest also coincides with the current highway expansion projects' contested portion. The Mon Desir to Debe stretch of the proposed highway may allow for heavy traffic to bypass San Fernando all the way to the refurbished Point-A-Pierre refinery.”
However, the author does make the point that it is not a fact that these associated activities in the south-west are specifically or even primarily for tar sands development. However, “every single one of these infrastructure projects makes tar sands cheaper, more practical and more viable than without them.”
Part of me thinks that the author sounds too much like a conspiracy theorist than an analyst with insight into the energy industry or energy policy. Given the technological advances available, perhaps oil extraction would not need to be as environmentally detrimental as it was in the past? Further, given weak gas prices, Trinidad and Tobago's people may not wish to say no to the jobs and wealth that could be created from more oil. Anyway, I am sure that if there were any credibility in this tar sands talk…the government would have told us about it. Wouldn’t they?
Despite our current challenges, I continue to have the audacity of hope that we will all enjoy a brighter tomorrow.
Read more on derrenjoseph.blogspot.com.
Note: The blog that used to be here is now at https://www.mooresrowland.tax/.